Iran rejects United States allegations over Saudi drone attack

Mike Pompeo

A weekend drone attack on Saudi Arabia that cut into global energy supplies and halved the kingdom's oil production threatened Sunday to fuel a regional crisis, as the US released new evidence to back up its allegation that Iran was responsible for the assault amid heightened tensions over Tehran's collapsing nuclear deal.

In a statement released by the state-run news agency, Prince Abdulaziz bin Salman revealed that the attacks have reduced daily production by about 5.7 million barrels.

After visiting the incident locations, Amin H Nasser, Saudi Aramco president & CEO, said: "We are gratified that there were no injuries".

Houthi insurgents supported by Iran said in a statement that they carried out the attacks.

US President Donald Trump himself acknowledged during a telephone conversation with Saudi Crown Prince Mohamed bin Salman that the attack had affected both the global and the US economy.

The minister told the Saudi Press Agency that explosions at Saudi Armaco's Khurais and Abqaiq plants on Saturday caused several fires, but there were no injuries.

"The two fires have been controlled".

Abqaiq is about 60km (37 miles) south-west of Dhahran in Saudi Arabia's Eastern Province, while Khurais, some 200km further south-west, has the country's second largest oilfield.

In an attack claimed by Al-Qaeda in February 2006, suicide bombers with explosive-laden vehicles attempted to penetrate the processing plant, killing two security guards.

The government hopes to raise up to $100 billion based on a $2 trillion valuation of the company in what would be the world's largest IPO, but the listing has been repeatedly delayed due to low oil prices, among other factors.

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"Oil prices will jump on this attack, and if the disruption to Saudi production is prolonged, an SPR release ... seems likely and sensible", said Jason Bordoff, founding director of the Center on Global Energy Policy at Columbia University in NY. The disruption represents half the output of the kingdom, which is the world's biggest oil supplier.

Crude oil futures shot up 9.5% to $60 as trading opened Sunday evening in NY, a dramatic increase.

With markets closed for the weekend at the time of the attacks, there has been no immediate impact on global oil prices.

This latest attack underlines the strategic threat posed by the Houthis to Saudi Arabia's oil installations.

Iran denies supplying the Houthis with weapons.

The Saudi air force has been pummelling targets in Yemen for years. It shows that the era of armed drone operations being restricted to a handful of major nations is now over.

Drone technology, albeit of varying degrees of sophistication, is available to all - from the United States to China, Israel and Iran - and from the Houthis to Hezbollah.

"The Saudi-led coalition has been fueling the flames of war in the region with recurrent acts of aggression against Yemen and committing various war crimes for around five years, while Yemenis have proved that they stand against war and aggression", the spokesman said.

Yemen has remained wracked by violence since 2014, when the Iran-aligned Houthi group overran much of the country, including the capital Sanaa.

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